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Database of national-level policy measures

Eurofound's EU PolicyWatch collates information on the responses of government and social partners to the COVID-19 crisis, the war in Ukraine, rising inflation, as well as gathering examples of company practices aimed at mitigating the social and economic impacts.

Factsheet for measure BG-2022-28/2761 – measures in Bulgaria

State aid for discount of 25 cents per litrе of fuel

Държавна помощ за отстъпка от 25 стотинки на литър гориво

Country Bulgaria , applies nationwide
Time period Temporary, 09 July 2022 – 31 December 2022
Context War in Ukraine
Type Other initiatives or policies
Category Responses to inflation
– Support for fuel expenses
Author Tsetomila Sabcheva and Luboslav Kostov (Citub) and Eurofound
Measure added 18 August 2022 (updated 09 October 2022)

Background information

As an anti-inflation measure, fuel consumers will benefit from a discount three days after the promulgation of the amendments to the State Budget Act (SBA) in the Official Gazette.

Compensation will be charged as a reduction of the final price when paying for the quantity at the checkout, regardless of whether this is done in cash or by card. For the discounted fuel, the petrol station will issue an extended fiscal receipt, which will contain the registration number of the vehicle, the type and quantity of fuel filled, as well as the discount.

Content of measure

Fuel users will be able to use a discount of 25 cents per litre on A95 petrol, diesel, gas or LPG (liquefied petroleum gas). The type of fuel needs to be the lowest priced, which means that the BGN 0.25 reduction cannot be applied when filling up with A98 petrol or diesel with additive. The discount will be available at petrol stations that have agreed to provide it, and there are no restrictions on the number of refills or the amount of fuel, according to the National Revenue Agency. The State Budget allocated BGN 150 million for this aid.

The discount applies to private cars only and cannot be used for company cars. No invoice may be required when using this state aid.

Drivers of leased vehicles may also benefit from the discount if an individual is registered as the user of the vehicle.

It is also expected that propane-butane and methane prices will decrease further, as a reduction of VAT rate from 20% to 9% was also introduced.

Use of measure

Since the beginning of the measure there is no official information how many private vehicles benefit from this aid.

Almost 16 million BGN is the total amount of the compensation of 25 cents per litre of fuel (diesel, gasoline, propane-butane, methane) as of 25 July 2022. This is reported by the National Revenue Agency (NRA). The amounts of the discount for the different types of fuel are: gasoline - BGN 4 million, diesel - nearly BGN 5.5 million, propane-butane - BGN 6.3 million, methane - BGN 4,150.

The anti-crisis measure in support of individuals, for which BGN 150 million were allocated in the budget update, is planned to be in force until the end of the year, and it started to be applied in practice from 9 July. Thus, for 17 days in July, nearly BGN 16 million or an average of around BGN 1 million per day have been spent.

Target groups

Workers Businesses Citizens
Does not apply to workers Does not apply to businesses Applies to all citizens

Actors and funding

Actors Funding
National government
Company / Companies
National funds

Social partners

Social partners' role in designing the measure and form of involvement:

Trade unions Employers' organisations
Role Unknown Unknown
Form Not applicable Not applicable

Social partners' role in the implementation, monitoring and assessment phase:

  • No involvement
  • Main level of involvement: Unknown

Involvement

Unknown.

Views and reactions

In media there are some preliminary reactions of employers. For example Dimitar Hadjidimitrov, Deputy Chairman of the Association of Bulgarian Traders, Producers, Importers and Transporters of Fuels stated (22 June 2022) that ''... there is no possibility of lower fuel prices on the market. The pump price is optimal, it is another question how it is composed when we have an economic entity that holds 80% of the market and slight dumping occurs.''

The Bulgarian Industrial Association (BIA) strongly criticised the proposed budget update. According to BIA, there are no adequate measures in the proposed changes to fight the main economic problem - the rising inflation. In a statement, the BIA pointed out that there are no measures to reduce the excess amount of money in circulation, nor are there any measures to increase GDP and balance the increase in the money supply.

The trade unions are among the active critics of the state policy toward inflation and high fuel prices. Bulgaria has the fifth highest inflation rate among EU countries. On an annual basis in April 2022, inflation was 14.4% against the EU average of 8.1%, according to an analysis by Confederation of Independent Trade Unions in Bulgaria (CITUB) on the government's anti-crisis measures. There is no targeted trade union view on this particular measure.

Sources

  • 31 May 2022: Trade unions are unhappy that Bulgaria is among the EU inflation champions (bnr.bg)
  • 07 June 2022: BIA: regarding the update of the state budget (www.bia-bg.com)
  • 22 June 2022: Fuel traders: no possibility for lower prices (www.24chasa.bg)
  • 01 July 2022: NRA: We use a discount of 25 cents per liter (kik-info.com)
  • 27 July 2022: On average, the discount of 25 cents for filling up a liter of fuel is for about BGN 1 million per day. (www.bta.bg)

Citation

Eurofound (2022), State aid for discount of 25 cents per litrе of fuel, measure BG-2022-28/2761 (measures in Bulgaria), EU PolicyWatch, Dublin, https://static.eurofound.europa.eu/covid19db/cases/BG-2022-28_2761.html

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